These are “all the systems needed” for global growth and a set of risks, Barclays says. Here’s how to play.

U.S. stocks look poised for a modest gain in the open market on Thursday after technology talks on Wall Street on Wednesday.

Overnight, Chinese technology stocks were piled up as the U.S. securities regulator said it had put into practice a new law that could lead to removal from U.S. markets.

Despite recent pressure on stocks, in ours call of the day, Barclays said it was “all systems going” and the set of risks would continue and set global growth at the fastest pace in four decades.

The bank, in its latest global outlook, said fears of an overheating U.S. economy would not deviate from the path of risk, urging investors to stay excessive on stocks.

“Yes, multiple equity stakes have increased over the past year, but much of the rally is the result of an absolutely stunning recovery in earnings,” said macro research leader Ajay Rajadhyaksha.

He noticed that the S&P 500 SPX,
-0.55%
Earnings are not expected to reach the level of 2019 at least until 2021, but earnings in the fourth quarter of 2020 beat earnings a year earlier. “A full V-shaped recovery within a year, despite continued constraints related to the pandemic,” he added.

The outlook for earnings, a consensus on growth of more than 21% between 2020 and 2021 was another reason to be strong, Rajadhyaksha said.

Stock market estimates may look elevated from history, but “the scale of positive news expected in the coming quarters means stocks still don’t look expensive to us,” Barclays added.

The bank maintained the 4,000 target for the end of 2021 at the S&P 500 level, and within U.S. inventories it was overweight in industry and healthcare, as well as in hardware and semiconductors. Strategists added that estimates looked more attractive in the UK and the eurozone, despite the slow introduction of vaccination against COVID-19.

In Europe, the bank has excess stocks, such as financial and commodity stocks, but is more selective in the cyclical and defense sectors with reduced weight.

Even the bond sale in the first quarter, which threatened to halt the rally, only reflected a brighter picture of growth, but Barclays said it remains a risk.

“However, the fly in the ointment is the separation of bonds and the fear that inflation will force the Fed into an aggressive mountaineering cycle that destroys a set of risks. We think these fears are exaggerated, “the bank said.

“The bond market tried to jump out of the set of risks in Q1. And he failed. “

Graph

Russell 2000 RUT,
-2.35%
closed below the 50-day moving average (DMA) but more than 20% above the 200-day moving average on Tuesday, for the first time in the index’s 42-year history, the Bespoke Investment Group noted. The worst day of the index in nearly a month ended its longest series of closures above the 50-day moving average in the last 10 years.

Bespoke Investment Group

Four of the five times the index closed below its 50-DMA, and more than 15% above its 200-DMA happened “early on perennial bulls,” Bespoke added.

Markets

Futures on US stocks ES00,
-0.36%

YM00,
-0.34%

NQ00,
-0.43%
indicated a little more on the eve of opening, with Nasdaq futures 0.2% after the COMP technology index,
-2.01%
fell 2% on Wednesday. European stocks have fallen lower as concerns about the third wave of coronavirus on the continent remain in focus. Oil prices fell early Thursday after shooting higher on Wednesday amid a continuing blockade of the Suez Canal.

Buzzing

AstraZeneca AZN,

released updated data on a phase 3 trial of its vaccine on Wednesday night, saying it was 76% effective in preventing symptomatic COVID-19. The British-Swedish drug company originally said on Monday that its vaccine had 79% efficiency.

H&M HM.B,
-4.04%
and other clothing and footwear brands, including Nike NKE,
-2.89%
and Adidas ADS,
-5.06%,,
face a reaction in China over concerns about forced labor in the Xinjiang region.

GameStop GME,
-33.79%
shares suffered their worst day in seven weeks on Wednesday, after profit and sales in the fourth quarter missed expectations. Shares of video game vendors were also downgraded by Wedbush analyst Michael Pachter.

The Suez Canal, one of the world’s most important trade routes, is still blocked by a large cargo ship as efforts to free the vessel entered on the third day.

The European Union has put forward proposals for tighter controls on exports of COVID-19 vaccines to the UK and other countries with better vaccination rates. The proposals will be discussed on Thursday, but tensions between the UK and the EU can be eased with a co-operation report.

Random readings

A new British £ 50 bill in honor of mathematician Alan Turing will feature GCHQ’s “hardest puzzle ever”.

Good catch: A fisherman rescues a boy stranded on ice.

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